The Sol Meliá Extraordinary General Shareholders’ Meeting held on Friday in Palma de Majorca approved a capital increase of up to 30,760 million pesetas to cover the take-over bid made for Meliá Inversiones Americanas (MIA).

A majority of shareholders approved the increase with an issue premium of 3,423 pesetas for each share of nominal value 100 pesetas, along with the suppression of the preferential subscription rights of existing Sol Meliá shareholders.

In order to comply with the promises made in the take-over bid, the Company will issue a number of warrants equivalent to the number of Sol Meliá shares that will be received by MIA shareholders that accept the bid. If the bid were to be accepted by all of them, a maximum of 5,142,725 warrants would be issued.

The warrants will be traded on the markets, are free of any expenses and are guaranteed by the Banco Central Hispano. Each warrant will represent a right for those shareholders accepting the bid to receive an amount equivalent to the difference between 7,465 pesetas and the weighted average stock price of Sol Meliá in the 20 market sessions prior to the 30th.

June in the year 2000, up to a maximum of 1,835 pesetas. Any such payment would be made from the personal funds of the Escarrer family, the Company’s controlling shareholder, and would suppose no cost for Sol Meliá shareholders.

The Company will be requesting the admission of the new Sol Meliá shares and warrants on the four Spanish stock exchanges as soon as is possible after the operation concludes on the 22nd. February.

MIA shareholders accepting the bid will receive nine newly-issued Sol Meliá shares for every ten shares in MIA as well as a warrant for each new Sol Meliá share as indicated in the bid registered with the Spanish stock exchange commission on 30th. December 1998. MIA shareholders interested in accepting the bid should make their application through their financial representatives before the coming 22nd. February.

The new Sol Meliá shares will enjoy the same financial and political rights as existing shares, thus allowing holders of the new shares to receive any dividends paid out from the date they are subscribed.

The take-over is aimed at a total of 9,701,550 MIA shares, 82.57% of the total number, with the remaining 17.43% already owned by Sol Meliá.

The Balearic Merchant Register had named Deloitte & Touche as independent experts to write up the required report on the capital increase to cover the issue of shares for the MIA take-over. The report was issued on 21st. December 1998 and verified the valuation criteria used and the value of the shares to be issued in the capital increase.

Once the take-over bid is completed and the company is merged with Inmotel, Sol Meliá intends to distribute a dividend equivalent to between 15% and 25% of annual results, providing economic circumstances and the Company’s investment policy advise such a dividend.

46 new hotels added in 1998
The Chairman of Sol Meliá, Gabriel Escarrer, stated during the meeting that the operation has been designed to create value for those shareholders that desire to form part of a great hotel industry project and to allow the Company to acquire a greater financial strength, “which will place us amongst the top ten hotel companies in the world.”

The Chairman also informed the meeting that a total of 46 hotels had been added to the Company in 1998 with a total of 16,475 rooms, well above expectations for the year. Gabriel Escarrer also informed shareholders that during the first few weeks of 1999 there are also 33 new contracts that will allow the Company to incorporate the same number of hotels, mostly in the European Divisions.

The Company board also approved the report on the adaptation of technology with respect to the year 2000. All of the required changes will be implemented during the first half of the year.

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